RT Journal Article
T1 Stochastic Frontiers and Asymmetric Information Models
A1 Gagnepain, Philippe
A1 Ivaldi, Marc
AB This article is an attempt to shed light on the specification and identification of inefficiency in stochastic frontiers.We consider the case of a regulated firm or industry. Applying a simple principal-agent framework that accounts for informational asymmetries to this context, we derive the associated production and cost frontiers. Noticeably this approach yields a decomposition of inefficiency into two components: The first component is a pure random term while the second component depends on the unobservable actions taken by the agent (the firm). This result provides a theoretical foundation to the usual specification applied in the literature on stochastic frontiers. An application to a panel data set of French urban transport networks serves as an illustration.
PB Kluwer
SN 0895-562X
YR 2002
FD 2002
LK https://hdl.handle.net/10016/5030
UL https://hdl.handle.net/10016/5030
LA eng
DS e-Archivo
RD 19 may. 2024